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Institutional Investment in Listed Private Equity
Author(s) -
Cumming Douglas,
Fleming Grant,
Johan Sofia A.
Publication year - 2011
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/j.1468-036x.2011.00595.x
Subject(s) - private equity fund , private equity , private equity firm , institutional investor , business , finance , club deal , equity (law) , private investment in public equity , market liquidity , alternative investment , cash flow , private equity secondary market , investment management , investment (military) , corporate governance , politics , law , political science
This paper examines institutional investors’ propensity to invest in a relatively unknown asset class of listed private equity. Based on data provided by LPEQ, Preqin and Scorpio Partnership covering 171 institutional investors in Europe in 2008–2010, we find allocations are primarily a function of size, type, location, decision‐making authority and liquidity preferences. Investment in listed private equity is more commonly made by institutions that are smaller, private (not public) pension institutions, institutions that have a preference for liquidity, quick access, and administrative and cash flow management simplicity, and institutions that are based in the UK, Switzerland, Sweden and the Netherlands. As well, institutions are less likely to invest in listed private equity when investment decision‐making is empowered to an alternative asset class team .